Regal Partners (ASX:RPL) to acquire minority stake in Argyle Group

Regal Partners has agreed to acquire a minority stake in Argyle Group, a leading Australian manager of water entitlement portfolios with approximately $1.4 billion in funds under management.

The move marks an expansion for Regal Partners within the lucrative Australian water entitlements market.

Post-transaction, Regal's pro-forma funds under management across its real and natural assets strategies will rise to $2.1 billion, contributing to approximately $16.4 billion across the Regal Partners group on a 100% funds under management basis.

Founded in 2007 and headquartered in Brisbane, Argyle Group has built a strong reputation over its 17-year history for managing water and agricultural investments.

Under the terms of the unit and share sale agreement, Regal Partners will acquire 40% of the issued share capital of Argyle Group Holdings and 40% of the units of Argyle Group Holdings Trust.

The transaction follows Argyle's corporate restructuring, which includes the divestment of its agricultural investment management business.

The $12 million consideration for the transaction, subject to customary adjustments, will be financed from Regal Partners' existing cash reserves.

Regal anticipates the acquisition to modestly enhance its earnings per share in 2024 without factoring in synergies.

Post-transaction, Argyle's management, led by Kim Morison and Investment Director Louise Kerber, will retain a 60% stake.

Brendan O'Connor, CEO of Regal Partners, has expressed enthusiasm about the partnership, emphasising the strategic fit and growth prospects within the water market.

The transaction is expected to close by the end of July, pending the finalisation of the agriculture divestment and associated restructuring.